With the expiration of the federal tax credit, the housing market is facing a key inflexion point as we head into the thick of the summer vacation season. The government stimulus has certainly helped spur a rebound in the real estate market, but the recovery is fragile and observers are watching closely to see if the market can grow without the support of government aid.

Several key economic announcements out this week could bolster the nascent recovery. On Thursday, mortgage finance giant Freddie Mac announced that U.S. mortgage rates have fallen to a record low. Rates for 30-year fixed loans declined this week to 4.57 percent from 4.58 percent. That is the lowest since Freddie Mac began tracking rates in 1971.

While the overall level of real estate activity has eased in recent weeks with the expiration of the tax credit deadline, many economists believe that low mortgage rates will spur growth in the market by reducing borrowing costs for home buyers. Mortgage interest rates have tumbled in the past two months as concern that a debt crisis in Europe may spread boosted demand for the safety of bonds, including mortgage-backed securities.

Meanwhile, Reuters recently reported that consumer sentiment rose in June to its highest level since January 2008 while reports of job losses were down sharply from a year ago.

The Thomson Reuters/University of Michigan’s survey of consumers, a key gauge of consumer sentiment, rose to 76 from 73.6 in May. The figure was above the median forecast of 75.5 among economists polled by Reuters. At the same time, reports of job losses fell by half since last June, from 65 percent of respondents to 29 percent, the survey showed.

“The June 2010 survey recorded the most favorable news heard by consumers about jobs in five years,” Richard Curtin, director of the surveys, said in a statement. But he cautioned that consumers “do not anticipate significant declines in unemployment during the year ahead.”

Consumer sentiment is seen as a proxy for consumer spending, which fuels around 70 percent of the U.S. economy. Positive consumer sentiment is particularly critical to the housing market. If buyers are more optimistic about their future, they’re more likely to take out a mortgage and buy a home.

So where does this all leave us as we look at the local housing picture? As reports from our local offices indicate, the market continues to be steady in most communities. But the recovery from last year’s recessionary lows will likely be a gradual one with its share of fits and starts along the way. Unemployment levels will play a key role in the recovery, as will the health of the stock market and the overall national economy.

While there are certainly economic challenges right now, for buyers with a long-term view, the current market provides an attractive opportunity to invest in real estate while mortgage rates are at historic lows and homes are priced very competitively. Savvy buyers are taking advantage of this great combination of home prices and interest rates.

The annual Night at the Rockies is a special client appreciation event that recognizes past, present and future home buyers and sellers working with Coldwell Banker Residential Brokerage real estate professionals. Last year, nearly 10,000 people attended the event, which shattered a Coors Field record for attendance by a single affiliated group.

Scott Brown wins Second Base Contest

This year was even better with nearly 11,000 in attendance. It was a perfect Denver evening with clouds that made it look as though the crowd may end up wet, but it turned out to be just enough to cool everyone down. Unfortunatley, the home team lost. However, Scott Brown from Coldwell Banker’s Denver West office won the Second Base Contest, and Ann Meadows from the Southeast Metro office won a trivia Contest!

“During these challenging economic times, Coldwell Banker Residential Brokerage is offering a series of fun and inexpensive events as a way for our clients and associates to enjoy the summer,” said Chris Mygatt, president of Coldwell Banker Residential Brokerage in Colorado. “It’s just one more benefit of doing business with Colorado’s leading real estate company.”

Ann Meadows wins Rockies Trivia Contest

Broker associates e-mailed more than 51,000 e-Postcards on June 8, 2010, inviting clients to various client appreciation events scheduled in Denver and along the Front Range. Agents followed up with personal phone calls to their sphere of clients to personally invite them to attend the complimentary evening at the ballpark. Attendees to the Night at the Rockies were recognized by the Coors Field announcer and on the ballpark’s huge electronic scoreboard.

Coldwell Banker Residential Brokerage associates look forward to treating even more people to a night at the ballpark next year!

Although Denver has not yet bridged the gap, home prices are restoring. One of only 13 cities that showed a year over year increase, Denver is still a great place to be!

For the seventh month in a row, home prices in the Denver area showed a year-over-year price increase in May, rising 3.6 percent from May 2009, according to the latest S&P/Case-Shiller Home Prices Index, released Tuesday.

Also, local prices rose 0.6 percent in May from April levels.

But both increases were below the average for the 20 U.S. cities tracked by the closely-watched Case-Shiller report from Standard & Poor’s.

The metro-Denver price increases came even though the deadline for new home puchase offers to be eligible for the federal homebuyer tax credit expired April 30. Homes that were under contract by then are still eligible for the credit, however.

Out of 20 cities covered in the Case-Shiller report, Denver was one of 13 that showed a year-over-year increase in prices in May.

In April, Denver saw a 4.4 percent year-over-year price increase, the largest of the last six months. As compared to a year earlier, Denver prices climbed 4.1 percent in March, 3.6 percent in February, 2.6 percent in January, 1.2 percent in December 2009 and 0.5 percent in November 2009.

November 2009’s rise was the first year-over-year home price increase in the Denver area since November 2006, according to a Denver Business Journal analysis of Case-Shiller data. Between those months, Denver had 36 straight months of year-over-year price declines.

As recently as early 2009, Denver was showing year-over-year home price declines of 5 percent or more, peaking at a 5.7 percent drop in February 2009.

As far as month-to-month price changes, Denver’s 0.6 percent price rise in May over the previous month followed a 1.7 percent monthly increase in April and a 0.6 percent rise in March. Before that, Denver experienced month-to-month price declines every month between September 2009 and February 2010.

For all 20 cities in the latest Case-Shiller report, home prices in May rose an average 4.6 percent from the same month of 2009, and rose 1.3 percent from the previous month.

“While May’s report on its own looks somewhat positive, a broader look at home price levels over the past year still do not indicate that the housing market is in any form of sustained recovery,” David Blitzer, chairman of S&P’s Index Committee, said in the Case-Shiller report. “Since reaching its recent trough in April 2009, the housing market has really only stabilized at this lower level.”

The report assigns index values to the 20 cities based on current average home prices in relation to what they were in January 2000.

Denver’s index for May was 128.24, meaning that prices were 28.2 percent higher than they were in January 2000. The 20-city average index was 146.43 for May.

Denver ranked 11th among the 20 cities in the May report in its rate of home-price growth over the previous year.

San Francisco — which suffered some of the nation’s most severe declines in home values through the Great Recession — saw the biggest year-over-year price increase in May of the 20 cities: 18.3 percent. It was followed by San Diego, up 12.4 percent, and Minneapolis, up 11.6 percent.

On the other hand, prices in Las Vegas dropped 6.5 percent in May from a year earlier, while Charlotte saw a 2.8 percent decline and Detroit a 2.5 percent drop.

Moving into a home of any size can be a large undertaking but if you are looking to downsize, the transition can be even more challenging. Whether you are an empty nester requiring less space, a young professional moving to a new city for job opportunities or a family looking to save money, you’re among the many buyers in today’s real estate market are opting to downsize.

Though moving to a smaller space may involve making a few sacrifices, having less room does not mean having to scale back on style. In fact, a homeowner with minimal square footage can maximize their home’s overall charm just by using a bit of creativity.

Here are several tips for how to downsize with style:

Keep, sell, donate, and trash. Although it is difficult to part with possessions, doing so is often a must for anyone planning to move into a smaller home. Begin by dividing belongings into keep, sell, donate, and trash categories. Post items for sale online, or hold a garage sale; offer unwanted furniture and clothes to a friend or family member or donate it to local charities. Knowing that others will appreciate these things might make parting with the items a bit easier.

Scale it back. Unless you are trying to make a dramatic statement with an extra-large couch or coffee table, a small space will likely look and feel better with moderately-sized or even slightly smaller furnishings. In fact, a room with furniture that appropriately fits the space will actually seem larger. It is all about scale.

Look for multipurpose living room furniture. A piece of furniture with more than one purpose is a downsizer’s dream. Coffee tables and ottomans that double as storage cubbies allow guests a place to rest their drinks and feet while the host’s belongings remain hidden underneath. And who needs a guest room when the couch has a pull-out bed?

Don’t just dream of storage, dream on it. Platform and storage beds are ideal for storing infrequently-used items that such as seasonal clothing, spare bedding and linens. Plus, they free up valuable space in bedroom closets, especially those that are shared!

“Build” a wall with a simple screen. The smaller the home, the more purposes each room serves. But this doesn’t mean you must eat where you sleep. If you are opting to downsize, consider putting up a screen to divide a room with more than one use into sections. The room will still feel open but the screen will provide some much needed privacy and separation.

Consider hanging curtains. Just because the new home has fewer windows, doesn’t mean you have to settle for boring window treatments. Hanging curtains on the side of the window pane can make it appear larger, and curtains that run from floor to ceiling can create the illusion of height.

Maximize wall space. If you have run out of floor space and need additional room, look to the walls. Shelves that are hung on walls or above doorways will provide more space and serve as stylish room accents.Furthermore, while it sounds simple, the addition of a mirror on any wall will add depth and light to a room, making even the smallest space seem larger. Mirrors also add elegance and charm to a home’s décor, often at a reasonable price.

Utilize new technology. New technology, such as flat screen televisions and laptop computers, allows for more space in the living or office areas while adding a modern touch to the home.

These are just a few ideas to get you started. Consider reading design books and magazines, or browsing websites like www.realsimple.com, for more suggestions. Besides providing great ideas, these resources are filled with easy, do-it-yourself projects that are perfect for homeowners interested in saving even more money during their move.

Compromising on space doesn’t mean you have to compromise on style. With just a few simple touches and some thoughtful planning, your cozy cottage or condo can be transformed into a warm and welcoming home with plenty of room for everyone to live comfortably and happily.

There’s no question. The early part of the decade was all about excess. Big cars. Big jewelry. Big homes. But the market correction changed everything. Or did it? This week we’re asking our readers, now that we’ve been through the recession, how has it changed your view on homeownership? We’re interested in knowing what you think.

As mentioned in recent editions of Weekly Market Watch, a key inflection point in the market has been reached. The government stimulus has been spurring the market on for more than a year and has since reached its limit. The numbers released of late, however, still reflect home sales spurred by the end of the tax credit.

Now only time will tell and the next few months should be very interesting. Essentially the question “how well can the housing market fly on its own?” is about to be answered. Fortunately, we have record low interest rates on our side.

The latest report from NAR gives a mixed picture. Existing home sales in June fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million units, from 5.66 million in May. But, they are 9.8 percent higher than the 4.89 million unit pace in June 2009.

On a national level, Lawrence Yun, NAR chief economist, said “Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient place will home sales return to sustainable healthy levels.”

But as people know, real estate is local. And the latest local figures are showing an interesting trend. This past week the Coldwell Banker Residential Brokerage Luxury Home Report was released. Keep in mind, luxury homes have been one of the hardest hit market niches for months. The latest report, which analyzes data across the MLS, showcased luxury home sales in Denver metro area last month rose to their highest level in nearly two years. A total of 67 homes sold for more than $1 million in June, up 22 percent from May and 3 percent from a year ago when 55 and 65 properties sold, respectively. It was the highest level for luxury sales since 89 properties changed hands in August 2008.

Additionally, the median sale price of million-dollar homes in June was $1.34 million, up 4.7 percent from May’s $1.28 million median, but down 2.8 percent from the median a year ago of $1.38 million. Home sellers received an average of 90 percent of their asking price, down from 93 percent in May but up from 87 percent last year.

What these figures show is that the high-end market in the Denver metro area continues to stabilize and improve. With interest rates at historic lows and sellers pricing their homes very competitively, buyers have responded.

The bottom line is that sooner or later, housing will come back. While it will undoubtedly take the housing market some time to return to normalcy, it’s clear that all segments of the market are slowly but steadily improving following last year’s low point. We saw it in the entry level last year as bargain hunters took advantage of attractive prices on distressed properties. And now we’re seeing the middle and upper ends of the market bouncing back nicely.

The progress made so far is encouraging – even now – after the government stimulus has run its course. The market is on the right track, but that’s not to stay there won’t be a pause for a breather here and there.

Now, let’s take a look at this week in real estate:

Boulder/Longmont— Boulder reports our inventory levels increased by 11%, while sales activity remained flat. Showings are down significantly – 20% or 152 showings on a base of 753 showings during the previous two week period. Agents in the office are active in showing and working with buyer clients. Agents report that they need to work with two or more lenders to get transactions closed. Over all it is taking Agents longer to get clients to decide on properties. Buyers still come into the marketplace believing they are going to get a great deal on the house of their choice.

Colorado Springs— Showings seem to be picking up again as families return from their vacations. We see that the listing of higher priced homes has picked up and buyers are now making offers instead of just looking. With interest rates under 5%, this trend should continue throughout the remainder of the year.

Evergreen/Conifer— Sales are still below the normal seasonal levels from prior years. Three different listings were subject to multiple offers, two in the $200,000 to $300,000 range & one in the low $500,000. About half of the buyers were local & half were out of area. Buying activity included cash offers on REO properties to short sales to 2nd homes with price ranges from a low of $135,000 to a high of $900,000. The majority of our activity remains in the lower price points.

Denver Central – No information reported.

Devonshire— Once again this week we’re feeling the uncertainty in the public even though interest rates are at historic lows. With the jobs report not as strong as predicted, consumers seem to be undecided as to moving at this time. Our showings were slower all last week but it’s interesting to note, they have picked up again this week. We are delighted to report an increase in offers and showings in our homes listed above $600,000. We have seen a month over month increase in closed sales in that upper end of the market so we are feeling cautiously optimistic. The Spring surge is over & we are hoping that it is Summer vacations that are slowing real estate activity. Let’s hope that August brings another flurry of real estate successes.

Loveland— No information reported.

North Metro— Even though it’s been quite hot, open house traffic is picking up as are our calls into the office for assistance with buying or selling. We have seen a decrease in the number of new listings half way through July so far as compared to last year at this time. Some sellers are still holding out, hoping to see values increase before putting their home on the market. The number of buyer contracts has increased. Agents are finding that there continues to be numerous short sale properties on the market. Many of their listing appointments turn out to be short sales. That’s ok! Our agents are well versed & trained in handling the short sale process and are there to help if you are in this situation.

Parker— Our showings are up about 20% the last two weeks, but still down from last month. The low interest rates, under 5% are sparking buyers to get out and look. We expect our under contracts to increase in the next couple of weeks.

Southwest Metro – Showings have started to increase although they are still down from earlier this year. We’re seeing increased activity as regards to our inventory. Agents are still very busy with buyers however buyers are taking their time to make a decision regarding writing an offer. We’re seeing activity slow down in the 1st time homebuyer market, due in part to the end of the tax credit. Interest rates are great & buyers want to look at as much inventory as possible before making a decision. The number of potential short sale listings are on the increase. Open houses have been great and so have our floor calls.

Bikers and beers. In most parts of the country, those two elements may be reasons to move elsewhere. But in the foothills of Colorado’s Front Range, bikers mean cyclists: Fort Collins has 29 miles of well-used trails.

As for beers, this town has become a high-end microbrew mecca. New Belgium Brewery (maker of Fat Tire) is based in this entrepreneurial town, and competitors are moving in.

People here aren’t slackers either. Bolstered by Colorado State University, which employs 7,000, “the Fort” is a center of economic activity. Hewlett-Packard, the city’s second-largest employer, announced worldwide layoffs in June, but they won’t affect Fort Collins. In fact, the company is adding jobs here.

This idyllic town — No. 1 in 2006 — would rank even higher but for one thing. (No, it’s not last summer’s Balloon Boy hoax, perpetrated by the local Heene family.) Colorado schools are hurting. After the state sliced public schools budget this year, Fort Collins’s Poudre School District laid off 139 full-time employees. —Pieter van Noordennen via CNNMoney.com

Highlands Ranch, CO

Top 100 rank: 12Population: 98,000

With over 8,100 acres of open space, 22 lush parks, and activity possibilities that span from hiking to golf, this unincorporated area outside Denver offers the best of the Colorado outdoors.

Visit Highlands Ranch Mansion, a historic structure, or one of the town’s four state-of-the-art recreational facilities.

A strong school district and steady home prices appeal to families. Highlands Ranch’s business parks are also a draw. —Brittani DiMare via CNNMoney.com

Broomfield, CO

Top 100 rank: 19Population: 55,000

With a prime location only 20 minutes from both Denver and Boulder, Broomfield is a safe, active community with a very strong school district and much for residents to enjoy.

Spend the day walking along Broomfield’s 66 miles of trails or start up a game on one of the sports fields in Broomfield’s numerous green parks.

If it’s raining, head to the Paul Derda Recreation Center, a facility with an indoor aquatic park, climbing wall, game room, and fitness classes. —B.D. via CNNMoney.com

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